CTA and Currency Translation
The next most common type of rules people would have in their application is rules to handle CTA and currency translation. Before I show these rules, it makes sense to review how to calculate CTA.
What is CTA? CTA stands for Cumulative Translation Adjustment or Currency Translation Adjustment. It is an entry in a translated balance sheet in which gains and/or losses from translation have been accumulated over a period of time. The CTA is required under the FASB No. 52 rule.
A simple example would be one where you had an opening balance sheet with the following (opening period rate is 1.5):
At the end of the year, ...
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